What the Cardano Alonzo update means to you
Cardano has been breaking records lately and ranks among the top cryptocurrencies in terms of market capitalization, hitting an all-time high of € 2.61 on September 2. In part, Cardano’s success can be attributed to the imminent release of the Alonzo update, scheduled for September 12. Let’s see what this hard fork means to you.
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What is Cardano?
If you have not yet read our in-depth article on Cardano, we will give you a quick summary: it is a project that seeks to make a secure, scalable and transparent network available to the general public. This is why this open-source project has always been very transparent about its future plans, including clear steps and a detailed roadmap. After Byron, the founding stage of Cardano, and Shelley, a stage focused on decentralization, the implementation of Alonzo represents the most relevant stage in the Goguen stage, of smart contracts.
Highlight of Cardano’s Goguen stage
The Alonzo hard fork is scheduled for September 12 and will allow the use of smart contracts at Cardano. Smart contracts are self-executing and immutable contracts written in computer code. This function is called to open a new and wide range of possibilities for the Cardano blockchain, including payments and transactions between pairs, but also crowdfunding, auctions and many other options.
This also means that DApps (decentralized applications) will be able to work on Cardano for the first time. Therefore, the update is paving the way to make decentralized finance (DeFi) usable in everyday applications and available to everyone, in line with Cardano’s goal of bringing blockchain technology to the masses.
Cardano, Ethereum’s leading competitor
Cardano has often been compared to Ethereum. However, thanks to the Alonzo hard fork, Cardano, once considered just one more potential rival, could now become a serious competitor fighting for leadership against Ethereum. If all goes according to plan with the update, Cardano could prove to be a safe and flexible alternative to Ethereum when executing smart contracts.
Ethereum smart contracts are very popular, but the implementation of smart contracts in Cardano will offer users a more environmentally friendly and user-friendly alternative, with a higher number of TPS (transactions per second): 257 in the case of Cardano and 15 on Ethereum, as well as lower fees and similar use cases.
Still, Ethereum is also on track to provide these features, which will be available to ETH users once the move to proof-of-stake (PoS) has been completed. While the London hard fork of Ethereum is the next step for the arrival of Ethereum 2.0 in the future, Ethereum continues to run on proof-of-work (PoW), which requires large amounts of power. Cardano, on the other hand, already uses a proof-of-stake consensus algorithm, making it more sustainable for the time being than Ethereum, whose switch to PoS is in the works and unlikely to happen this year. It will certainly remain interesting to see how Ethereum and Cardano progress in terms of mass adoption.
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What does the new hard fork mean to you?
The Alonzo hard fork will bring long-awaited changes to Cardano, and will allow users to create and formalize their own smart contracts. It’s been open for testing for some time, and if all goes according to plan, the mainnet launch (which was initially planned for August) will take place on September 12.
If you are a Bitpanda user and you are one of the recent Cardano investors or have just been maintaining a Cardano savings plan, there is no reason to worry. At Bitpanda, they will take care of the update and make sure to process the hard fork when it is available. Bitpanda will have to disable deposits and withdrawals for the duration of the update, but trading will not be affected.
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April 24, 2024
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